Transcript by The Hon Jenny Macklin MP

Paid Parental Leave – ABC

Program: ABC Radio National Breakfast


FRAN KELLY: Well let’s get some more answers now on the Government’s paid parental scheme and how it will work. Minister Jenny Macklin joins us from Canberra. Jenny Macklin, welcome to Breakfast.

JENNY MACKLIN: Thank you Fran.

FRAN KELLY: Minister, why has the Government decided to announce this policy in some detail before Budget night?

JENNY MACKLIN: We did want to announce it on Mother’s Day. We wanted to really indicate to mothers and especially those mothers who have waited for years for the introduction of a paid parental leave scheme, that we understood just how important it is. How important it is for mums, how important it is for dads too, and especially for new babies to have their mum and dad around with them in those first important months of life.

FRAN KELLY: But you’re still going to keep them waiting. This start date is not until January 2011, this is an election promise?

JENNY MACKLIN: We’ve talked a lot with business about this scheme and of course the Productivity Commissioner’s world did a lot of consultation with business. There’s a lot of working through to do before we put this scheme in place and of course we’ve got legislation to develop and put through the Parliament. That will be done before the election.

FRAN KELLY: If it’s done before the election why don’t you bring this in before the election? If this Government is truly committed to making this happen, why don’t you bring it in while you’re in power to make sure it can happen, and does happen?

JENNY MACKLIN: Well we will certainly put the legislation through the Parliament. We’re making the commitment in this Budget. We do understand just how critical it is to get this in place but we also want to do it right and we want to do it right with business. This is the first time this has been done in Australia. Finally we’re catching up with the rest of the world on paid parental leave but we want to do it working closely with business. And of course doing it with them so that parents, mums and dads, can get their paid parental leave paid by a business is important for them to keep their workforce attachment.

FRAN KELLY: Okay, well now you’ve released it let’s try and get some of the details clear.


FRAN KELLY: It’s call paid parental leave rather than paid maternity leave, does that mean the father or the mother can take the 18 weeks paid leave?

JENNY MACKLIN: That’s right. Either the father or the mother can take the 18 weeks or they can take some share each so it may be the case that the mother wants to recover from the birth and breastfeed the baby for a little while, and then the dad might like to take some the paid parental leave as well. So that will be up to parents to decide how they want to share that paid parental leave.

FRAN KELLY: And it’s the minimum wage, it’s $544 a week for 18 weeks?

JENNY MACKLIN: Yes, that’s right. We’re going to pay it at the Federal minimum wage level for 18 weeks. As you know the Productivity Commission recommended that we pay it for 18 weeks and to also pay it at the level of the Federal minimum wage.

FRAN KELLY: But let’s look at the means testing. The Productivity Commission didn’t recommend a means test but you are putting one in, where does it cut out, and what’s the criteria when it comes to determining who the primary carer is, what does it mean?

JENNY MACKLIN: The primary carer will be the person who decides to take the paid parental leave first, so in most circumstances you would expect it would be the mother, so the income test will be on her income in the financial year prior to her giving birth to the baby.

FRAN KELLY: So the means test, it only cuts out if the primary carer, as you said in most cases the mother, has earned $150,000?

JENNY MACKLIN: Yes, that’s correct.

FRAN KELLY: That’s not going to catch many people, what percentage of working women would earn more than $150,000 a year do you think?

JENNY MACKLIN: It’s true, that’s not going to affect very many women, but what I wanted to do is make sure that it was fair compared to the means test that applies to Family Tax Benefit Part B for example. That’s done at $150,000 as well and is on the income of a single income earning family.

FRAN KELLY: Okay, so it doesn’t actually, just to be clear on this, it doesn’t actually go to the income of the entire family. A family could earn half a million dollars and still get this?

JENNY MACKLIN: We wanted to do it on the income of the primary carer, because of course, one of the objectives of this scheme is to keep the workforce attachment, particularly for mothers. Australia has a relatively low workforce participation rate for women who are returned to work after giving birth to babies, and one of the things we wanted to do is increase that attachment to work, that’s why we’re going to pay the paid parental leave via employers, that will happen in a vast majority of cases, but we also of course didn’t want to discourage women by the introduction of this means test.

FRAN KELLY: And presumably the primary carer can only be the mother or the father, it can’t be the grandmother or…

JENNY MACKLIN: Well there may be circumstances where as a result of family violence or other unforeseen circumstances where we have to look at the definition of the primary carer but we’ll work through that over the next few months.

FRAN KELLY: And if you’re not in the workforce, if you’re a so-called stay at home mother, you get the Baby Bonus?

JENNY MACKLIN: Yes, you’ll continue to receive the Baby Bonus which is worth $5,000. You’ll also receive Family Tax Benefit Part B, which is worth three and a half or $3,600 right now, of course that’s indexed and continues to go up, so and you’ll also receive Family Tax Benefit Part B, and that of course depends on how many children you have and what your income is.

FRAN KELLY: You could conceivably be better off under that than under the….

JENNY MACKLIN: Depending on your income you could be, that’s right.

FRAN KELLY: Now, do you expect, this isn’t coming in for more than a year, year and a half, do you see a vacuum appearing here where, you’re worried, thought about it all that companies will just wait now and wait for the Government to take up the slack?

JENNY MACKLIN: Well I think we’ve seen some companies continuing to make big decisions about paid parental leave. As we speak last week BHP Billiton made a terrific decision to introduce a generous paid parental leave scheme.

FRAN KELLY: Sure but they didn’t have your announcement then.

JENNY MACKLIN: No they didn’t. But equally I think it demonstrates that they understand how important it is to support, especially the women in their workforce to keep them connected to their company. Many other companies feel the same way and we’ve already seen some comment from business this morning. Heather Ridout for example, has commented that she does not believe that this will spell the end of employer sponsored schemes.

FRAN KELLY : Okay, but is there anything, we must go now, but is there anything to guard against corporations that are already provided winding it back and just buffering their scheme with yours?

JENNY MACKLIN: I don’t think that will happen. This is all about making sure that paid parental leave is there for those thousands of women, especially in low income jobs where they’ve never had any, any access to paid parental leave.

FRAN KELLY: All right, Jenny Macklin that you very much for joining us on Breakfast.

JENNY MACKLIN: Thank you Fran.

FRAN KELLY: Jenny Macklin is the Minister for Families, Housing and Community Services.